This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

3667

Vol. 63, No. 16

Monday, January 26, 1998

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part(s) 1001, 1002, 1004, 1005,

1006, 1007, 1012, 1013, 1030, 1032,

1033, 1036, 1040, 1044, 1046, 1049,

1050, 1064, 1065, 1068, 1076, 1079,

1106, 1124, 1126, 1131, 1134, 1135,

1137, 1138, and 1139.

[Docket No. AO–14–A68, et al.; DA–98–01]

Milk in the New England and Other

Marketing Areas; Notice of Hearing on

Proposed Amendments to Tentative

Marketing Agreements and Orders

7 CFR part Marketing area AO Nos.

1001 .............. New England ......................................................................................................................................................... AO–14–A68

1002 .............. New York-New Jersey ........................................................................................................................................... AO–71–A83

1004 .............. Middle Atlantic ....................................................................................................................................................... AO–160–A72

1005 .............. Carolina .................................................................................................................................................................. AO–388–A10

1006 .............. Upper Florida ......................................................................................................................................................... AO–356–A33

1007 .............. Southeast ............................................................................................................................................................... AO–366–A39

1012 .............. Tampa Bay ............................................................................................................................................................ AO–347–A36

1013 .............. Southeastern Florida ............................................................................................................................................. AO–286–A43

1030 .............. Chicago Regional .................................................................................................................................................. AO–361–A33

1032 .............. Southern Illinois-Eastern Missouri ......................................................................................................................... AO–313–A42

1033 .............. Ohio Valley ............................................................................................................................................................ AO–166–A66

1036 .............. Eastern Ohio-Western Pennsylvania ..................................................................................................................... AO–179–A60

1040 .............. Southern Michigan ................................................................................................................................................. AO–225–A47

1044 .............. Michigan Upper Peninsula ..................................................................................................................................... AO–299–A30

1046 .............. Louisville-Lexington-Evansville .............................................................................................................................. AO–123-A68

1049 .............. Indiana ................................................................................................................................................................... AO–319–A43

1050 .............. Central Illinois ........................................................................................................................................................ AO–355–A30

1064 .............. Greater Kansas City .............................................................................................................................................. AO–23–A63

1065 .............. Nebraska-Western Iowa ........................................................................................................................................ AO–86–A52

1068 .............. Upper Midwest ....................................................................................................................................................... AO–178–A50

1076 .............. Eastern South Dakota ........................................................................................................................................... AO–260–A34

1079 .............. Iowa ....................................................................................................................................................................... AO–295–A46

1106 .............. Southwest Plains ................................................................................................................................................... AO–210–A56

1124 .............. Pacific Northwest ................................................................................................................................................... AO–368–A26

1126 .............. Texas ..................................................................................................................................................................... AO–231–A64

1131 .............. Central Arizona ...................................................................................................................................................... AO–271–A34

1134 .............. Western Colorado .................................................................................................................................................. AO–301–A25

1135 .............. Southwestern Idaho-Eastern Oregon .................................................................................................................... AO–380–A16

1137 .............. Eastern Colorado ................................................................................................................................................... AO–326–A29

1138 .............. New Mexico-West Texas ....................................................................................................................................... AO–335–A40

1139 .............. Great Basin ............................................................................................................................................................ AO–309–A34

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Notice of public hearing on

proposed rulemaking.

SUMMARY: A public hearing is being held

in response to industry requests to

consider flooring the level of the basic

formula price for the purpose of

determining Class I and Class II prices

through December 1998. Mid-America

Dairymen, Inc., the proponent of the

proposed amendment, has requested
3668 Federal Register / Vol. 63, No. 16 / Monday, January 26, 1998 / Proposed Rules

that this issue be handled on an

emergency basis.

DATES: The hearing will convene at 9:30

a.m. on February 17, 1998.

ADDRESSES: The hearing will be held at

the Jefferson Auditorium, South

Agriculture Building, 1400

Independence Avenue, S.W.,

Washington, D.C. 20250.

FOR FURTHER INFORMATION CONTACT:

Constance M. Brenner, Marketing

Specialist, Order Formulation Branch,

USDA/AMS/Dairy Division, Room 2971,

South Building, P.O. Box 96456,

Washington, D.C. 20090–6456, (202)

720–2357, e-mail address

ConnielMlBrenner@usda.gov.

SUPPLEMENTARY INFORMATION: This

administrative action is governed by the

provisions of sections 556 and 557 of

Title 5 of the United States Code and,

therefore, is excluded from the

requirements of Executive Order 12866.

Notice is hereby given of a public

hearing to be held at the Jefferson

Auditorium, South Agriculture

Building, 1400 Independence Avenue

S.W., Washington, D.C. 20250,

beginning at 9:30 a.m., on Tuesday,

February 17, 1998, with respect to

proposed amendments to the tentative

marketing agreements and to the orders

regulating the handling of milk in the

New England and other marketing areas.

The hearing is called pursuant to the

provisions of the Agricultural Marketing

Agreement Act of 1937, as amended (7

U.S.C. 601–674), and the applicable

rules of practice and procedure

governing the formulation of marketing

agreements and marketing orders (7 CFR

Part 900).

The purpose of the hearing is to

receive evidence with respect to the

economic and marketing conditions

which relate to the proposed flooring of

the basic formula price, with the

proposed amendments set forth

hereinafter, and any appropriate

modifications thereof, to the tentative

marketing agreements and to the orders.

In addition to considering the specific

proposal submitted by Mid-America

Dairymen, Inc. (now part of Dairy

Farmers of America), testimony should

be addressed as to whether the $13.50

level proposed or some alternative level

would be more appropriate.

The proposed amendment, if adopted

through December 1998, should be

considered an interim action because

the entire pricing structure of the

Federal milk order program is under

consideration as part of the Federal

order reform process required by the

1996 Farm Bill.

Evidence also will be taken to

determine whether emergency

marketing conditions exist that would

warrant omission of a recommended

decision under the rules of practice and

procedure (7 CFR 900.12(d)) with

respect to the proposal. Since this

proposal will be heard on an urgent

basis, it is necessary to provide

interested parties with less than 15 days

notice of the public hearing to ensure

that the proposed amendments, if found

to be appropriate, will be effective as

soon as possible.

Initial Regulatory Flexibility Analysis

Pursuant to the requirements set forth

in the Regulatory Flexibility Act (RFA)

(5 U.S.C. 601 et seq.), the Agricultural

Marketing Service (AMS) has

considered the economic impact of the

proposed amendment on small entities

and has prepared this initial regulatory

flexibility analysis. The RFA provides

that when preparing such analysis an

agency shall address: the reasons,

objectives, and legal basis for the

anticipated proposed rule; the kind and

number of small entities which would

be affected; the projected recordkeeping,

reporting, and other requirements; and

federal rules which may duplicate,

overlap, or conflict with the proposed

rule. Finally, any significant alternatives

to the proposal should be addressed.

This initial regulatory flexibility

analysis considers these points and the

impact of this proposed regulation on

small entities.

The cooperative association

requesting the hearing observes that per

capita milk production is declining in

many states with the greatest declines in

areas with high Class I utilization, that

the number of dairy farms continues to

decline at a rapid rate, and the milk-feed

price relationships have dropped

dramatically. The cooperative states that

the price floor is needed to maintain

productive capacity sufficient to meet

current and anticipated future needs of

milk for Class I and Class II uses.

After receiving a hearing request and

determining that the proposed

amendment would not violate the

provisions of the Act and that the issues

raised for consideration warrant a

public hearing, AMS is authorized to

hold a public hearing to consider

adoption of the proposed amendment.

This Act seeks to ensure that, within

the statutory authority of a program, the

regulatory and informational

requirements are tailored to the size and

nature of small businesses. For the

purpose of the Act, a dairy farm is a

‘‘small business’’ if it has an annual

gross revenue of less than $500,000, and

a dairy products manufacturer is a

‘‘small business’’ if it has fewer than 500

employees. For the purposes of

determining which dairy farms are

‘‘small businesses,’’ the $500,000 per

year criterion was used to establish a

production guideline of 326,000 pounds

per month. Although this guideline does

not factor in additional monies that may

be received by dairy producers, it

should be an inclusive standard for

most ‘‘small’’ dairy farmers. For

purposes of determining a handler’s

size, if the plant is part of a larger

company operating multiple plants that

collectively exceed the 500-employee

limit, the plant will be considered a

large business even if the local plant has

fewer than 500 employees.

USDA has identified as small

businesses approximately 80,000 of the

83,000 dairy producers (farmers) that

have their milk pooled under a Federal

order. Thus, small businesses represent

approximately 96 percent of the dairy

farmers in the United States. On the

processing side, there are over 1,200

plants associated with Federal orders,

and of these plants, approximately 700

qualify as ‘‘small businesses,’’

representing about 55 percent of the

total.

During August 1997, there were 524

fully regulated handlers, 134 partially

regulated handlers and 111 producerhandlers submitting reports under the

Federal milk marketing order program.

This volume of milk pooled under

Federal orders represents 69 percent of

all milk marketed in the U.S. and 72

percent of the milk of bottling quality

(Grade A) sold in the country. Producer

deliveries of milk used in Class I

products (mainly fluid milk products)

totaled 45.5 billion pounds—43.5

percent of total Federal order producer

deliveries. More than 200 million

Americans reside in Federal order

marketing areas—77 percent of the total

U.S. population.

In order to accomplish the goal of

imposing no additional regulatory

burdens on the industry, a review of the

current reporting requirements was

completed pursuant to the Paperwork

Reduction Act of 1995 (44 U.S.C.

Chapter 35). In light of this review, it

was determined that this proposed

amendment would have little or no

impact on reporting, recordkeeping, or

other compliance requirements because

these would remain identical to the

current Federal order program. No new

forms have been proposed, and no

additional reporting would be

necessary.

This notice does not require

additional information collection that

requires clearance by the OMB beyond

the currently approved information

collection. The primary sources of data

used to complete the forms are routinely
Federal Register / Vol. 63, No. 16 / Monday, January 26, 1998 / Proposed Rules 3669

used in most business transactions.

Forms require only a minimal amount of

information which can be supplied

without data processing equipment or a

trained statistical staff. Thus, the

information collection and reporting

burden is relatively small. Requiring the

same reports for all handlers does not

significantly disadvantage any handler

that is smaller than industry average.

No other burdens are expected to fall

upon the dairy industry as a result of

overlapping Federal rules. This

proposed rulemaking does not

duplicate, overlap or conflict with any

existing Federal rules.

To ensure that small businesses are

not unduly or disproportionately

burdened based on this proposed

amendment, consideration was given to

mitigating negative impacts. Flooring

the BFP should not have any special

impact on small handler entities.

Handlers similarly located would be

subject to the same minimum Class I

prices, regardless of the size of their

operations, and all handlers would be

subject to the same minimum prices for

Class II milk. Such handlers would also

be subject to the same minimum prices

to be paid to producers. These features

of minimum pricing should not raise

barriers to the ability of small handlers

to compete in the marketplace. It is

similarly expected that small producers

would not experience any particular

disadvantage to larger producers as a

result of this proposed amendment.

Interested parties are invited to

present evidence on the probable

regulatory and informational impact of

the hearing proposals on small

businesses. Also, parties may suggest

modifications of these proposals for the

purpose of tailoring their applicability

to small businesses.

Preliminary Cost-Benefit Analysis

To help fulfill the objectives of a

Regulatory Impact Analysis, a

preliminary cost-benefit analysis

follows:

The BFP is used as the basis for

establishing class prices paid by

handlers for milk in all Federal order

markets and varies month-to-month

depending on market conditions for

milk and milk products. The BFP is the

average price paid for manufacturing

grade (Grade B) milk in Minnesota and

Wisconsin in the base month updated to

the current month with a cheese-butternonfat dry milk product price formula.

The Class I price is the BFP plus a Class

I price differential that reflects the

added value needed to attract milk to

fluid milk processing plants, as well as

the additional costs of producing and

marketing milk for fluid use. As a result,

Class I prices vary among markets, being

generally higher in southern markets

and lower in midwestern markets. The

Class II price, like the Class I price, is

based on the BFP with a differential of

only thirty cents in all orders. The result

of establishing a floor under the BFP for

purposes of computing the Class I and

II prices would be to maintain these

prices at a level they otherwise might

not reach.

Dairy producers are expected to fare

about the same in 1998 as they did in

1997, according to recent estimates of

the Dairy Interagency Commodity

Estimates Committee (ICEC). The 1998

all-milk price was projected in

November 1997 to be slightly lower than

the 1997 all-milk price; $13.10 per

hundredweight in 1998 compared with

$13.35 in 1997. This preliminary

analysis was based on the $13.10

estimate. However, the 1998 estimate

was updated in January 1998 to $13.35.

As a result, the actual impact of a floor

under the BFP could be expected to be

less than shown in this preliminary

analysis. Further analysis will be based

on more recent price estimates.

A BFP floor for computing Class I and

II prices would apply only to the 70

percent of the milk marketed in the

United States that is marketed under

Federal milk orders. USDA’s

preliminary analysis indicated that

flooring Class I and Class II prices with

a $13.50 minimum BFP would increase

the U.S. all-milk price by $0.40 to $0.50

per hundredweight. Prices to producers

delivering to Federal order markets

could increase by an average of $0.60 to

$0.75 per hundredweight.

Producers delivering to markets with

higher Class I use, such as the three

Florida markets and the Southeast

market, would benefit more (as much as

$1.10–$1.30 per hundredweight) than

those delivering to markets with lower

Class I utilization. The attached table

provides estimates of change in the allmilk prices for all Federal order

markets, assuming BFP floors of $13.50

and $12.83 per hundredweight (the

October 1997 BFP).

CHANGE IN THE ALL-MILK PRICE.—ALTERNATIVES FLOORING BFP AT $13.50 OR $12.83 FOR CLASS I AND CLASS II

PRICING CALENDAR YEAR 1998

Marketing area

Change in all-milk price per

hundredweight

$13.50 Floor $12.83 Floor

New England ............................................................................................................................................................ $0.20 $0.11

New York-New Jersey ............................................................................................................................................. .74 .40

Middle Atlantic .......................................................................................................................................................... .81 .45

Carolina .................................................................................................................................................................... 1.28 .70

Louis.-Lex.-Evans ..................................................................................................................................................... 1.22 .67

Southeast ................................................................................................................................................................. 1.21 .66

Upper Florida ........................................................................................................................................................... 1.18 .64

Tampa Bay ............................................................................................................................................................... 1.28 .70

Southeastern Florida ................................................................................................................................................ 1.30 .71

Michigan Upper Peninsula ....................................................................................................................................... 1.13 .62

Southern Michigan ................................................................................................................................................... .90 .49

E. Ohio—W. Pennsylvania ....................................................................................................................................... .88 .48

Ohio Valley ............................................................................................................................................................... 1.14 .63

Indiana ...................................................................................................................................................................... 1.20 .66

Chicago Regional ..................................................................................................................................................... .29 .16

Upper Midwest ......................................................................................................................................................... .26 .14

Iowa .......................................................................................................................................................................... .50 .27

Nebraska-Western Iowa ........................................................................................................................................... .64 .35

Eastern South Dakota .............................................................................................................................................. .93 .51

Central Illinois ........................................................................................................................................................... 1.09 .60

S. Illinois-E. Missouri ................................................................................................................................................ 1.05 .57
3670 Federal Register / Vol. 63, No. 16 / Monday, January 26, 1998 / Proposed Rules

CHANGE IN THE ALL-MILK PRICE.—ALTERNATIVES FLOORING BFP AT $13.50 OR $12.83 FOR CLASS I AND CLASS II

PRICING CALENDAR YEAR 1998—Continued

Marketing area

Change in all-milk price per

hundredweight

$13.50 Floor $12.83 Floor

Southwest Plains ...................................................................................................................................................... .75 .41

Eastern Colorado ..................................................................................................................................................... .72 .39

Greater Kansas City ................................................................................................................................................. 1.10 .60

Texas ........................................................................................................................................................................ .89 .48

New Mexico-West Texas ......................................................................................................................................... .42 .23

Southwestern Idaho-E. Oregon ............................................................................................................................... .11 .06

Great Basin .............................................................................................................................................................. .60 .33

Western Colorado .................................................................................................................................................... 1.23 .67

Central Arizona ........................................................................................................................................................ .65 .35

Pacific Northwest ..................................................................................................................................................... .42 .23

Federal Order Average ............................................................................................................................................ .65–.75 .35–.45

In addition to increasing income to

dairy producers, adoption of a BFP floor

would also result in increased prices of

fluid milk products to consumers.

Increased Class I milk prices would be

reflected in retail prices for fluid milk,

which may result in reduced per capita

consumption and an increase in total

consumer expenditures for dairy

products.

Legislative and Background

Requirements

The amendments to the rules

proposed herein have been reviewed

under Executive Order 12988, Civil

Justice Reform. They are not intended to

have a retroactive effect. If adopted, the

proposed amendments would not

preempt any state or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule.

The Agricultural Marketing

Agreement Act provides that

administrative proceedings must be

exhausted before parties may file suit in

court. Under section 8c(15)(A) of the

Act, any handler subject to an order may

request modification or exemption from

such order by filing with the Secretary

a petition stating that the order, any

provision of the order, or any obligation

imposed in connection with the order is

not in accordance with the law. A

handler is afforded the opportunity for

a hearing on the petition. After a

hearing, the Secretary would rule on the

petition. The Act provides that the

district court of the United States in any

district in which the handler is an

inhabitant, or has its principal place of

business, has jurisdiction in equity to

review the Secretary’s ruling on the

petition, provided a bill in equity is

filed not later than 20 days after the date

of the entry of the ruling.

Request for Public Input

Interested parties who wish to

introduce exhibits should provide the

Presiding Officer at the hearing with 6

copies of such exhibits for the Official

Record. Also, it would be helpful if

additional copies are available for the

use of other participants at the hearing.

List of Subjects in 7 CFR Parts 1001

through 1139

Milk marketing orders.

The authority citation for 7 CFR Parts

1001 through 1139 continues to read as

follows:

Authority: 7 U.S.C. 601–674.

The proposed amendments, as set

forth below, have not received the

approval of the Secretary of Agriculture.

Proposed by Mid-America Dairymen,

Inc.:

Proposal No. 1: Through December

1998, amend the introductory text of

§ ll.51 of 7 CFR Parts 1001 through

1139 to read as follows:

§ll.51 Basic formula price.

* * * For the purpose of computing

the Class I and Class II prices, the

resulting price shall be not less than

$13.50.

* * * * *

Proposed by Dairy Programs,

Agricultural Marketing Service:

Proposal No. 2: Make such changes as

may be necessary to make the entire

marketing agreements and the orders

conform with any amendments thereto,

that may result from this hearing.

Copies of this notice of hearing and

the orders may be procured from the

Market Administrator of each of the

aforesaid marketing areas, or from the

Hearing Clerk, Room 1083, South

Building, United States Department of

Agriculture, Washington, D.C. 20250, or

may be inspected there.

Copies of the transcript of testimony

taken at the hearing will not be available

for distribution through the Hearing

Clerk’s Office. If you wish to purchase

a copy, arrangements may be made with

the reporter at the hearing.

From the time that a hearing notice is

issued and until the issuance of a final

decision in a proceeding, Department

employees involved in the

decisionmaking process are prohibited

from discussing the merits of the

hearing issues on an ex parte basis with

any person having an interest in the

proceeding. For this particular

proceeding, the prohibition applies to

employees in the following

organizational units:

Office of the Secretary of Agriculture

Office of the Administrator, Agricultural

Marketing Service

Office of the General Counsel

Dairy Programs, Agricultural Marketing

Service (Washington office) and the

Offices of all Market Administrators.

Procedural matters are not subject to

the above prohibition and may be

discussed at any time.

Dated: January 21, 1998.

Enrique E. Figueroa,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 98–1813 Filed 1–23–98; 8:45 am]

BILLING CODE 3410–02–U